Cambodia is booming, and its flourishing economy is being fueled by investment from Chinese state-owned and private companies.

When planeloads of Chinese tourists land in Siem Reap to visit the world famous Angkor Wat temple complex, they could be forgiven for thinking they’re still in China despite having had their passports stamped. The motorized rickshaws known as tuk-tuks they take might have been donated by the government of Hubei province, the de rigueur Smile of Angkor Wat dance performance might have been operated by the Yunnan Media Industrial Investment Holding Group and, of course, there are the Chinese hawkers in the night markets.

Besides, the Chinese yuan is the second most commonly used foreign currency in the country after the US dollar, circulating widely among local guides and convenience stores.

About 333,900 Chinese tourists visited Cambodia in 2012, up 35 percent year-on-year and predicted to reach 1 million in 2020, according to Cambodia’s Ministry of Tourism.

Over the past 18 months, I have witnessed a growing flood of foreign investors, businesspeople and trade missions pouring into Myanmar to seek their fortunes in the last great frontier economy of Asia. At this week’s World Economic Forum in the capital of Naypitaw, foreign visitors will meet with Myanmar’s best and brightest in the hope of finding local partners to help them realize these ambitions.Most of these visitors are aware of the basic challenges of investing in Myanmar: significant corruption; untested legal systems; inadequate infrastructure; underdeveloped human resources and other issues. At Leonard Capital, we note that early investors in other emerging countries such as Cambodia and Laos faced similar limitations, but managed to mitigate these risks and make successful investments. From our experience in all these countries, the top challenge for investors in Myanmar will be finding reliable business partners who will properly align their interests with those of the foreign partner.

Leopard Capital - Press Release | May 30, 2013Leopard Capital LP has been named “Frontier Markets Investment Manager of the Year” in Acquisition International’s 2013 M&A Awards.The firm also won three additional awards in this year’s competition: “Private Equity House of the Year – Cambodia” for the second consecutive year, “Fund of the Year – Cambodia”, and “Boutique Private Equity House of the Year – Haiti”.The annual Acquisition International M&A Awards recognize the leading professionals in the tax, start-up advisory, hedge fund, private equity, venture capital, and real estate industries. A record number of votes were received in 2013 and winners were determined based on the total number of votes and in-house research. Acquisition International is the definitive magazine for venture capital, corporate finance advisers, and top tier management and it provides complete international coverage of M&A transactions, combined with industry expertise and sector analysis.

A “for-profit, for-good” startup, dloHaiti, raised $3.4 million in Series A funding
to bring clean, affordable water and new jobs to communities across Haiti,
according to the company’s chief executive and founder, Jim Chu.

Pronounced like the French word for water (“de l’eau”), dloHaiti sets up
solar-powered kiosks that purify water on-site. It also hires teams to
distribute the water to nearby communities. The kiosks are made from
off-the-shelf components, Chu said, and are optimized to treat Haiti’s abundant
supply of groundwater.

While Haiti is still rebuilding critical infrastructure after a
catastrophic earthquake in 2010, it experienced drastic water poverty,
especially in rural areas, many years prior, the CEO said. In Haiti, the lowest
price for treated water is 12 cents per gallon, about eighty times higher than
the lowest price in the U.S., according to research by dloHaiti.

Global Trading | May 15, 2013Leopard
Capital Fund Manager, Thomas Hugger of Leopard Asia Frontier Fund and Managing
Partner of Leopard Capital LP, goes through some of the major difficulties
faced in various frontier markets in Asia.

In
the frontier markets, even though you have electronic data services such as the
internet, social media, and Bloomberg, it is very difficult to get financial
papers or balance sheet papers, and other fundamental papers for some of the
companies in these locations. Even if you go to Bloomberg and search on Bangladesh,
you don’t have the balance sheet there. If you go into Bloomberg and look at
Mongolian stocks, you will often find the price, but the description says, “The
company currently has no available information on their current line of
business as of 08/2008”. These are often blue-chip companies, and sometimes we
have visited them or we have networks there, but there is limited information
available.

But this is frequently because business is based
on a more personal note, and I would say physical representation gives a big
advantage. Our strategy on the private equity side complements this, so
everywhere we have firms, we have offices. So we have an office in Cambodia, we
have an office in Laos, we have an office in Haiti. When we are successful in
fundraising for Myanmar and Bangladesh, we will have offices there too.

For private individuals it is still very
difficult to invest in these markets. Go to a private bank in Hong Kong or
Singapore, tell them you want to buy stock in Laos or even Vietnam and they
will often tell you “Oh we are sorry, we cannot execute”.

Emerging markets firm Leopard Capital
has successfully exited its entire investment in Cambodian mineral
water company Kulara Water to the company’s founding shareholder.

The transaction harvested an undisclosed profit for Leopard Cambodia
Fund, the firm said. It provided Kulara with venture financing and
operational support, enabling Kulara to complete its factory
construction and refine its business plan.

Richard Intrator, CIO of Leopard Cambodia Fund, said, “Leopard
Capital is proud to have helped create another world-class consumer
product and local brand in Cambodia. Kulara’s factory is now fully
operational, and eau Kulen is poised to become a significant player in
the local water market. Having supported Kulara from a concept to a
successful launch, we have now returned ownership to its founder and
will redeploy the sales proceeds into other promising businesses.”

Leopard Cambodia Fund was launched by Leopard Capital in April 2008
as the first private equity fund for Cambodia. It raised $34m and has
since made 14 investments in Cambodia, Thailand, and Laos, including
CamGSM, ACLEDA Bank, IPR, Kingdom Breweries, Tropical Beverage Co,
Kulara Water, Phnom Penh Water Supply Authority, Greenside Holdings, EDL
Genco and Engage.

Leopard Capital was founded in 2007 by Douglas Clayton and manages
two other funds: Leopard Haiti Fund, and Leopard Asia Frontier Fund.

Phnom Penh,
Cambodia – Leopard Capital LP announced today that Leopard Cambodia Fund LP
has invested in Engage Resources (Thailand) Co. Ltd. (“Engage”), a producer and
developer of kenaf-based products. Kenaf is a fibrous plant used in the animal
feed, construction, and paper & pulp industries. Leopard
Cambodia Fund’s investment provides growth capital required for Engage to
continue its product development and to expand its operations from Thailand
into Cambodia. This growth
capital injection will contribute to Engage’s product development, add value to
its core business, and assist its regional expansion by drawing on Leopard’s
local experience and networks.

Richard Intrator, Managing Partner and Chief Investment Officer of
Leopard Cambodia Fund LP, commented: “We are
pleased to invest in a fast-growing, pan-ASEAN agriculture business and help
introduce a new high-yielding crop into Cambodia.Engage’s management has taken a leading role
in developing more efficient methods of producing kenaf in Southeast Asia.”

Robert Brodie, the CEO of Engage, added: “We welcome Leopard Capital as a funding partner to our Group.
Leopard’s experience in developing projects and key networks across the region will
prove valuable as we expand our operations into Cambodia.”

A private equity COO fears rule tightening is too broad-brush and will inflate costs, while a fund-of-hedge-fund COO says clarity is needed over new reporting requirements.

Private equity and
fund-of-hedge-fund managers in Asia point to growing fundraising difficulties outside
the region amid a regulatory clampdown.

The alternative investment
fund managers directive (AIFMD) comes into force in Europe as early as this
June – reform that will reshape the way alt funds are marketed in the EU. No
matter where they are domiciled, all non-Ucits funds are covered under the
directive.

Thomas Hugger, COO for $57
million PE manager Leopard Capital, says having the same, broad-brushed
regulatory principles governing private equity funds and hedge funds fails to
take into account the customised nature of how PE sponsors put their money to
work.

He notes that using a
depository is a challenge for PE managers. Unlike hedge funds, PE sponsors do
not always invest in a company’s equity. Instead, they may invest by providing
mezzanine capital, convertibles, loans or other structured products and
derivatives.

Investing in
frontier markets is a challenge due to lack of liquidity and significant set-up
times. One way to circumvent these problems is to Invest in other people's
expertise through a managed fund.

We work hard to associate
ourselves with smart individuals where we can reciprocate value. This not only
gives us opportunities to put capital to work, but provides us the ability to
grow a powerful network filled with influential people.

One such person I have become
friendly with is Thomas Hugger, COO & CFO of Leopard Capital, a frontier
markets private equity fund we have discussed previously in these pages.

Thomas has had a global career,
spending 27 years in private banking, where he specialized in managing
portfolios of listed and unlisted equity investments. Further, he is a CFIA.
His most recent venture is the formation of the Leopard Asia Frontier Fund
(LAFF), a liquid investment vehicle focusing on Asia’s frontier markets.

I recently caught up with Thomas in Phnom Penh where we had a
discussion about his fund, as well as some opportunities he sees right now in
the countries LAFF is active in. Enjoy!

As billions of dollars of foreign assistance pour into
the “Pearl of the Antilles” driving economic growth, the CEO and Founder of
pioneering private equity firm Leopard Capital explains why he believes Haiti
is poised for growth and mutually beneficial investment opportunities abound

In
crisis lies opportunity, states an old Chinese proverb. When it comes to Haiti,
most outsiders comprehend the crisis part, having seen images and heard
accounts of the grinding poverty, the devastating earthquake, the homeless tent
dwellers and cholera outbreaks. An entrenched industry of non-government
organizations (NGOs) dutifully highlights Haiti’s heartbreaks, eager to
maintain the donation flow through their bureaucracies. While Haiti offers more
plotlines than tragedy, pathos dominates its international narrative.

About Leopard Capital

Leopard Capital was founded in 2007 by Douglas Clayton to manage private equity funds in frontier markets. In Leopard launched Cambodia’s first fund in the depths of the 2008 global financial crisis, and in 2012 created Haiti’s first fund after Haiti’s capital region had been devastated by an earthquake. Leopard’s on-site investment teams work closely with portfolio companies to build market leaders in basic sectors such as renewable energy, food processing, water, telecoms, and financial services.

Leopard Capital LP is domiciled in the Cayman Islands and has offices in Cambodia, and Haiti.